Zara Owner Hit By FX Swings and Strange Warm Weather

Post by Sameena Farooq | Dec 14, 2018

Zara owner Inditex has posted about slow sales growth that might happen due to the unusually warm weather and adverse currency moves.

Madrid: Inditex, on Wednesday, forecasted about the unusually warm weather September that has reduced more than $5 billion off from fashion retailers market value. 

The Spanish group, also the owner of upmarket label Massimo Dutti and teen label Bershka, posted a 3 per cent rise in sales will be anticipated at the end of November after an “extraordinarily warm September”. The sales rate has also bounced to 5 per cent in the month October and November. 

The fashion giant reported the rise in the earnings before interest and tax which is recorded of €3.07 billion high when compared to the previous year. 

During the first nine months of the year, the world has seen largest fashion retailer reporting a hike on about 3 per cent increase in sales to €18.4 billion and a 4 per cent increase in the net profits to €2.4 billion.

According to Inditex, the company will not cut its clothing prices from the September month, unlike its competitors which means this will result in low margin growth of 108 basis points throughout the third quarter.

The clothing retailer continues the sales and margin throughout the year.  

The CEO Pablo Isla told said, “We are able - with a significant negative currency impact -to maintain our margins.” He further said, “We consider (this) is something that shows the healthy execution of our business model.

The companies have declared last September that all its products will be available from the year 2020, including the markets where there is no virtual store. 

Pablo Isla wanted that the fashion collection should be readily available to all customers around the world. 

Isla said, “Even in those markets which do not currently have our bricks-and-mortar stores."

Other than Zara, Massimo Dutti and Bershka, Inditex has some more big brands name associated such as Pull & Bear, Stradivarius, Oysho and Uterque across its 7500 corporal shops. It has its operation in 49 markets online. 


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